Canadian farmers return to vegetable patch as currency slumps

WINNIPEG/CALGARY (Reuters) - Canadian farmers are cashing in on the highest vegetable prices in years, helped by the country’s weak currency and soaring costs of U.S. imports that have made them unexpected winners in a bearish commodity world.

Vegetables are seen at a farmers market in Los Angeles, California in a May 10, 2015 file photo. Canadian farmers are cashing in on the highest vegetable prices in years, helped by the country's weak currency and soaring costs of U.S. imports that have made them unexpected winners in a bearish commodity world. REUTERS/Lucy Nicholson/Files

Soft wheat and canola prices may diminish Canadian farm incomes by 9 percent this year. But it is the best of times for carrot and beet growers, part of a niche industry best-known for stocking farmers’ markets.

“Per acre, there’s nothing quite like it right now,” said Sam Hofer, who grows carrots at Dinsmore, Saskatchewan. “You can make good pocket money off 50 acres (20 hectares) of land.”

At Emile Marquette’s farm near Perigord, Saskatchewan, his 20 acres of beets may bring 10 times more net profit per acre than canola. That is due to beets’ higher output per acre as well as sky-rocketing prices.

The year ahead looks to have “huge potential,” Marquette said.

Fresh vegetable and fruit prices jumped 18 and 13 percent respectively in January year over year, according to Statistics Canada.

The cost of imported U.S. produce has spiked as the Canadian dollar CAD=, now trading around 74 U.S. cents, fell 16 percent last year. Excessive rain in some U.S. regions has added costs.

Marquette is part of a grower group that sells vegetables to Saskatchewan-based Federated Co-operatives Limited. The growers and co-op set price increases for 2016 of five to 10 percent on local produce that already fetches a premium.

It is a modest top-up, given store prices, but Marquette said farmers want to nurture demand.

Marquette is expanding beet plantings by one-third, or five acres, claiming more of his canola field.

Vegetable plantings in Saskatchewan may grow by up to 10 percent this year, said Bob Purton, president of Saskatchewan Vegetable Growers’ Association.

Purton sells his tomatoes and cucumbers to farmers’ markets and expects the best prices of his 15 years growing vegetables.

In Alberta, carrots’ value topped C$5.4 million last year, the highest since 1997.

The low Canadian dollar may also spur fruit exports to the United States, he said.

Federated Co-op has steadily bought more from Saskatchewan farmers in recent years. But the dollar’s slump has added to the urgency, said Mike Furi, manager of procurement and pricing at Federated’s subsidiary, The Grocery People.

Canada’s second-largest grocery chain Sobeys said it is also buying more from Canadian farmers. Sobeys is hiring four “local developers” in Alberta and British Columbia, whose mission is to find local farmers and vendors.

High grocery prices have ebbed, but another shock may be in store, Furi said.

Excessive rains and fluctuating temperatures in California and Florida may tighten supplies of celery, cauliflower and cabbage in March and April, spurring more demand for Canadian produce, Furi said.